Livestock futures are higher, crop prices mixed early Wednesday

Corn futures are nearly unchanged in trading early Wednesday morning. The March contract has been trending up since November 12 gaining more than 40 cents over that period of time. There isn’t a lot of bullish news to push prices higher, but the technical side of the market has definitely improved. One factor pushing corn prices up is the weather in South America, especially in Argentina. Wet weather has delayed corn planting to the point where acreage may be reduced or the corn planted well beyond the optimal period. That could help boost U.S. corn exports later in the crop year.

Soybean futures are 4 cents to 8 cents lower Wednesday morning. Soybean futures prices posted solid gains on Tuesday and the overnight pullback to probably some light profit taking. South American weather continues to be a generally bullish factor for the U.S. soybean market, with wet weather in Argentina and Dry weather in southern Brazil. Market technical factors are also generally positive. The March contract has rallied nearly 70 cents in less than 2 weeks. If the current pace of exports continues, the U.S. would reach the current forecast for the year by March.

Wheat futures are modestly lower in Wednesday morning trade. Prices soared on Tuesday as rumors that Brazil was buying U.S. hard red winter wheat swept through the market. There has been no confirmation of the rumor but supplies are so tight that the prices reacted very strongly to the rumor. Couple the possible increase in demand with ongoing weather problems in Argentina and in the U.S. southern Plains and the wheat market could get very tight next year.

Live cattle futures are trading a little higher Wednesday morning. The modest gains in futures are probably related to ideas that cash prices will be steady to higher this week. Cash bids so far are still about $3 to $4 below last week’s prices, but packers appear to be very short on inventory. Actual cash market activity is expected to start on Thursday. While the supply side of the cattle market is generally positive, traders are clearly concerned about the “fiscal cliff” and the possibility that economic growth will slow, reducing beef demand. Futures prices have strengthened over the past three weeks with the March contract gaining nearly $3.50 and approaching the contract high near $133.

Lean hog futures prices are 40 to 60 cents higher Wednesday morning. Solid gains in cash prices on Tuesday are driving up futures prices Wednesday morning. Cash hog prices were up by $2 or more in most locations Tuesday. The pork cutout value was also up yesterday, but not by as much as the increase in cash hog prices. The February hog contract has gained about $4 since early November. However, pork supplies are rising and concerns about demand could limit market upside potential.